Tuesday, August 31, 2010

New deal with Adidas

An Associated Press article came out yesterday on ESPN.com, reporting that Adidas and MLS signed a new eight-year contract that will run through 2018. The article suggests the deal is worth more than $200 million (according to "a person with knowledge of the deal"). A favorite site of ours, Footiebusiness, also has a nice article on the deal, which includes more information than the AP one.

Specifically, merchandise, equipment, uniforms, and increased advertising comprise the deal. However, the fact that MLS has a renewed strong partnership with Adidas is good for other programs too, as well as the league generally. For example, neither article mentions the Generation Adidas program, but Don Garber's statement that Adidas has "a clear vision for the sport in North America," and that it "[sees] MLS as a cornerstone of that vision," suggest that Generation Adidas has a reasonably healthy near future.

Footiebusiness also references this surprising (to me) statistic in this article in the Sports Business Journal: annual MLS merchandise sales have increased 600% over the past five years, topping out at $300 million most recently. The article then answers the first question that came to my mind: for how much of that jump can we directly thank David Beckham? Only $300,000 Beckham revenue dollars were made, but it's unclear by the text whether that was just in 2007 or to-date. Let me do some math...600% over five years made $300m, which means five years ago there were $50 million in merchandise sales...so that's a $550 million increase over five years, only $300 thou of which was directly from Beckham. That tells a pretty damn good story for the rest of the league. Or maybe Beckham's influence has been greater than Grant Wahl would have us think, in terms of raising interest in the rest of the league.

Anyway, merchandise is one of three major sources of revenue for most of the soccer world (the other two being gate and TV). While TV has been dispairingly flat over the past few years, and attendance has been up and down (down last season, up this season), it's good to know the league's merchandise sphere is doing this well.


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